Originally published by Supply Chain Management Review, hosted by Brian Straight, Editor in Chief of Supply Chain Management Review.
The retail landscape has changed dramatically in the past 10 years. The explosion of e-commerce, the Covid-19 pandemic, and nearshoring are just a few of the challenges the space has endured. And with each challenge comes another: managing procurement spend.
Dave Pennino, CEO of LogicSource, says that retailers and CPG companies are continuing to refine their procurement practices.
“Covid was horrible for a lot of obvious reasons,” Pennino said. “There were some bright spots that came out of the focus it brought us. Sourcing and procurement were not viewed as a critical function within the enterprise. In many corporations, supply chain [was not] a core product. Merchandising and retail has always been a core focus. But when it came to things like buying masks that you didn’t know you needed; you’d never contemplated blast screens for registers that you never had to buy before. All this stuff, it really, shined a light on the need for professional sourcing and procurement capability. And then you had really big supply chain continuity issues. I mean, you know, during Covid, you had things like shipping containers going from $7,000 a container to $57,000 a container overnight, and having to figure out how you were going to get your product into market without being able to pass that increase on to your customers, because some of the products you couldn’t. You take a client like Bic—pens, lighters, etc.—you you can’t pass that price along on a plastic pen. So you are now realizing how important sourcing and procurement was to not just saving money, but just staying open.”
LogicSource manages over $100 billion in spending for top brands including Bath & Body Works, Titleist, and Subway. It operates 36 procurement departments for consumer-facing businesses in areas including distribution, marketing, packaging and more.
Pennino joined the Talking Supply Chain podcast to discuss procurement and sourcing trends, including which technologies he believes will be the future of procurement.
Listen today.
